Answer
The Norwegian's favorite drink is the mineral water and the Japanese man has the pet Zebra.
Work Step by Step
Just as the book recommends, draw out a table while looking through this solution, it'll make it much easier to follow (have the book open too).
Let us first establish the ordering of the houses, of which there are five, namely $\{R, G, B, Y, W\}$. Since the Norwegian lives in the first house on the left, no other nationality can be in that household. The next clue is that the green house is immediately to the right of the white house. Now, since the Norwegian's house is next to the blue one, we are left with two possible house orders:
$(?, B, W, G, ?)$ or $(?, B, ?, W, G)$
Now we use the fact that the Englishman is in the red house. The yellow house is one of the two question marks above, but remember that the Norwegian lives in the leftmost house! (A person cannot be both Norwegian and English). Thus, the left house is yellow and the other is red. So our two potential solutions to the house ordering are:
$(Y, B, W, G, R)$ or $(Y, B, R, W, G)$
Furthermore, we have found out that the Norwegian is a diplomat and lives in the yellow house. However, studying the Norwegian, we can get more. Since he is a doctor, he cannot be a violinist, so he does not drink orange juice. Since he lives in the yellow house, he cannot live in the green house, so he does not drink coffee. Since the yellow house is not in the middle, he cannot drink milk. Finally, since the Italian drinks tea, the Norwegian cannot. This leaves as his only option the mineral water.
Now, since the horse lives in the house next to the diplomat (and hence the Norwegian), the horse is in the blue house. This implies that the Spaniard cannot live there since he owns a dog. Moreover, the Spaniard cannot live in the red house because the Englishman lives there. Similarly, he can't live in the yellow house. Thus, the Spaniard can live in either the green house or the white house.
Let us now ask the question: "can the Spaniard be the violinist?" Suppose he was not, then what other profession could he be? Since he has a dog, he cannot have a snail and is thus not the photographer. Moreover, the Norwegian is the diplomat and the Japanese is the painter, which leaves our Spaniard with only one profession: the physician (since we are assuming he isn't a violinist). But now what profession is the Italian? He can't be the violinist since he drinks tea and not orange juice, and he can't be the painter, diplomat, or physician since those are taken. Thus, the Italian must be the photographer, and so he breeds snails. Now, this leaves the final profession, the violinist, to the Englishman. So the Englishman drinks orange juice, and since he lives in the red house, it cannot be the middle house (since the middle household drinks milk). Thus, we have established the order of the houses to be:
$(Y, B, W, G, R)$ (Under the assumption that the Spaniard is not a violinist)
Let us see where the Italian lives. He cannot live in the red or yellow houses since those are occupied, and he cannot live in the green house since he drinks tea. But now he can't live in the white house since it is in the middle, and thus, drinks milk. We can then conclude that the Italian lives in the blue house. However, remember that the horse lives in the blue house, yet we also know that the Italian has snails! Hence, we have reached some contradictory information, via our assumption that the Spaniard was not the violinist. Thus, we can assert that the Spaniard is, in fact, the violinist.
With this information, we are almost done. Remember that the Spaniard could only live in the green house or the white house. Since the Spaniard is the violinist, he drinks orange juice, and so he cannot live in the green household since they drink coffee. This entails that the Spaniard lives in the white house. However, the middle house drinks milk, but now the white house drinks orange juice, so we have our final house order:
$(Y, B, R, W, G)$
So the Englishman, since he lives in the red house, must drink milk. Since the Italian drinks tea and not coffee he lives in the blue house and the Japanese man lives in the green house. Thus, the Italian has a pet horse, so he cannot be the photographer. Since all the other professions are taken, he is the physician and the Englishman is the photographer. We can now use that the fox lives in the house next to the physician to see that the fox is in the yellow house with the Norwegian diplomat. This is because the two neighboring houses of the physician (the Italian) are the yellow and red house, but the red house has the English photographer, who already has snails. Thus, the Norwegian has the fox, the Italian has the horse, the Spaniard has the dog, and the Englishman has the snails, so the Japanese man must have the Zebra. So we have our final solution:
The Norwegian's favorite drink is the mineral water and the Japanese man has the pet Zebra.
